• Most real estate professionals agree that the first offer sellers receive on their home is usually the best offer. Of course, this isn’t true in every situation, but there are reasons why agents believe this, and why they often suggest that sellers either accept the first offer or at least give it serious consideration.

• Buyers in the real estate market usually start off slowly by going to a few open houses, checking out prices online, and doing their homework.  They may even make first contact with an agent to assess what the agent thinks about the state of the local market.

• From there, the buyers begin to get more serious.  They may start going on private, second or third showings with their agent and become a “real dealer” – a buyer who is completely in the game, approved for a mortgage, and actively engaged with their mortgage lender or broker.  Real dealers are often the ones who write the first offer a seller receives on a property, and that’s why their offers should be taken seriously.

• An offer from a real dealer may not come in within days of a property going on the market.  But it will come from an informed buyer who is knowledgeable of the market.  If a home is priced too high and a month or two goes by without an offer, it will be the real deal buyer who has been watching the listing and waiting to see how the market responds.  If the buyer notes that there aren’t any offers on it and there is no activity after some time, the real dealer will come in with a low offer, which actually may be a good offer, on the seller’s home.

• While sellers may see a low offer as “insulting” and coming out of left field, the seller should still look at this offer closely and investigate who the buyer is, how long they have been looking, ask whether they’ve written other offers nearby, determine if they are working with a good local agent, and ask if the offer comes with a pre-approval letter.

• As hard as it may be for a seller to contemplate an offer much lower than their asking price, serious sellers should look at all the signs leading up to it and consider if this is the offer to accept

  

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Short Sale Soundoff: BofA refines process for valuation disputes

Bank of America has refined the process for settling valuation disputes during a short sale.

The value of a property is established by independent third-party vendors shortly after a short sale is initiated. Occasionally, however, a listing agent may wish to contest that value. When that occurs, there is now a revised process for reconsidering the value.

Process Steps

1. Tell your short sale specialist that you would like a reconsideration of the value.
2. Receive an investor-specific, easy-to-complete form from your short sale specialist that specifies all requirements for a successful value dispute.
3. Fill out the form and attach specified evidence.
4. Stay in touch with your short sale specialist for results.
5. Expect a value dispute review within 10-12 business days once all required information has been received.

When contesting a home value, make sure you have compelling evidence to support your claim.

Do not reference property pricing amounts in the narrative on the form. This violates appraiser independence policy and is against industry standards. Any reference to pricing will disqualify the dispute.

Provide comparables that are recent, proximate (nearby) and similar to the property in question.

• “Recent” means sold within 90 days of the actual value document date.

•  “Proximate” varies by location. In a rural area, for example, a home five miles away could be considered proximate.

• You will be able to provide additional notes to highlight characteristics of the comps.

When the dispute centers on property condition or hazards:

• Provide an itemized estimate from a licensed contractor on the contractor’s letterhead.

Provide photos to illustrate the repair, condition issue, or hazard you want to highlight.

Thank you for reading this post. If I can ever be of help in finding you the perfect property here in the Napa Valley, please email me at Curtis@NapaValleyAddress.com

Your Napa Valley Broker Extraordinaire, selling Real Estate here from its heart, Yountville

My website & blog: www.NapaValleyAddress.com

When to refinance again

Those who refinanced their mortgages a year or so ago, when interest rates averaged just below 5 percent for a 30-year fixed-rate loan, may be wondering whether it’s time to refinance yet again now that rates are at least a full percentage point lower.

Making sense of the story

• As of Thursday, according to Freddie Mac’s weekly survey, the average rate on a 30-year loan was 3.83 percent, down from 4.63 percent a year ago, setting a record low.

• According to financial planners, homeowners considering refinancing first should delve into their financial goals, specifically the length of time they plan to live in the home.

• Some homeowners decide it makes more sense to stay with their current mortgage, especially if the savings are small or they plan to move within a year or two.  According to one financial planner, when homeowners refinance, they’re not building equity; they’re starting at the beginning of the amortization tables.

• Amortization schedules work like this: In the first few years, almost all of the payment goes toward interest, so the longer the homeowner has the loan, the more is put toward the principal.

• Those who refinanced in the last year or two don’t have to consider amortization tables, but they do need to know their equity position – and when refinancing would begin to pay off.

• To calculate that, start with a rundown of all the closing costs, then divide the closing costs by the amount expected to be saved on each monthly payment.

• Depending on the lender, most homeowners likely need to have at least 20 percent equity, and maybe a little more, if they want to wrap closing costs into the new mortgage.

  

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  Your Napa Valley Broker Extraordinaire, selling Real Estate here from its heart, Yountville

  My website & blog: www.NapaValleyAddress.com

  .

Avoiding mortgage relief scams

The offers seem like answers to the prayers of a struggling homeowner: A promise of legal tactics to forestall foreclosure, reduce mortgage balances and interest rates, or restore credit.  But these so-called mass joinder lawsuits being advertising in mailings are fraudulent – sent out by companies purporting to be law firms, according to a consumer alert by the Federal Trade Commission’s (F.T.C.) website.

• Consumers can lose valuable time to these dishonest players – not to mention money.  The nonprofit Lawyers Committee for Civil Rights Under Law estimates that homeowners nationwide who reported scams to its database have lost more than $60 million in the last two years alone.

• There are many credible law firms around to help homeowners.  But some businesses might be promoting themselves as providers of legal services, they might have only one lawyer on retainer, as a way around F.T.C. rules that allow only lawyers to collect upfront fees on mortgage aid.

• Such firms, and people posting as lawyers, are fueling a 60 percent jump in complaints about mortgage scams this year, according to a report by the homeownership Preservation Foundation, which helps distressed homeowners.

• When speaking with a lawyer, consumers might ask about the lawyer’s track record, including documentation of successes via media reports or signed court documents awarding borrowers money or relief.

• Consumers should beware of promises.  According to the Homeownership Preservation Foundation, “legitimate lawyers don’t make guarantees, just like doctors don’t.”

• There are plenty of free services available at nonprofit groups certified by the Dept. of Housing and Urban Development.

• The CALIFORNIA ASSOCIATION OF REALTORS® also has information available about short-sale and foreclosure-prevention fraud.  Visit http://www.car.org/aboutus/forconsumers/loanfraud/for more information.

  

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  My website & blog: www.NapaValleyAddress.com

Granted, anyone worth there salt in this business knows better than to discriminate. But it is always nice to be given a head’s up about events in this industry. My only concern is how far will a private company go to try to get results and if the same private company doing the testing will be the same as doing the training? cheers cvc

Warning on Fair Housing Testers

REALTORS® should make sure they are properly trained to handle fair housing issues before engaging in any property management services. Both governmental fair housing agencies and private organizations may be actively seeking to uncover discriminatory acts in rental housing by using testers who pose as prospective tenants. These testers may use Craigslist and other sources to inquire about the availability of a property for rent, submit rental applications, or do other things to identify landlords and agents who violate fair housing laws. For example, the fair housing laws protect, among many others, tenants who use service dogs and those with children, as well as require landlords to make reasonable accommodations for persons with disabilities.

C.A.R. has received reports that a private company may also be using testers posing as prospective tenants to upsell its own services. The company purportedly uses testers to catch agents engaging in discriminatory acts, and then issues demand letters offering to settle if the agents sign up for the company’s own fair housing training courses. In at least one report, a brokerage paid a $25,000 settlement and was also required to sign up for three years of training at that company for which it had to pay $10,000 per year.

The best way to ensure that you do not run afoul of the law is to be knowledgeable about and strictly comply with federal and state fair housing laws, particularly those pertaining to service dogs and disability accommodations. Violations of such laws expose REALTORS® to potential liability, as well as DRE disciplinary action for license suspension or revocation.

From C.A.R. Realegal

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Finally, proof about how long it takes to get short sale approval from lenders from C.A.R. Newsline. Are Fannie Mae’s and Freddie Mac’s new guidelines, which take effect June 15, possible given their performance to date? These loan providers will then have 30 days to review and respond to short sale offers or requests,  If they need more than 30 days, they must provide the borrower weekly updates and a final response within 60 days. So I guess there will be many such updates going out.

Short Sale Soundoff: Lenders with fastest short sale response times

RealtyTrac has compiled a list of data revealing which lending institutions tend to move through the short sale process the quickest.  According to the data, Fannie Mae, Freddie Mac, and the Federal Housing Administration (FHA) had the shortest timelines at 193 days in January 2012, a decrease compared with a year ago when short sales averaged 248 days.  Ally Financial came in second at 321 days, reducing its timeline as well from 393 days a year ago.

PNC Financial Group was third, taking 353 days, though the bank takes longer than it did a year ago when it took 206 days.  Wells Fargo came in fourth at 385 days, followed by Bank of New York Mellon, 402 days; Bank of America, 403 days; and Sun Trust, 404 days.

Thank you for reading this post. If I can ever be of help in finding you the perfect property here in the Napa Valley, please email me at Curtis@NapaValleyAddress.com

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No Compensation for Full-Price Offer Under Non-C.A.R. Listing Agreement

A buyer’s broker who presented an all-cash full price offer was unable to recover any compensation as a third-party beneficiary of the listing agreement. Although this case does not involve a C.A.R. listing agreement, our Standard Forms Committee is nevertheless reviewing our commission language in light of this decision.

In this case, the sellers entered into a listing agreement to sell 46.8 acres of vacant land. The listing agreement, which was not a C.A.R. form, stated that the listing price was “$17 million cash or for such other price and terms acceptable to” the sellers. It also stated that a cooperating broker could, as a third party beneficiary, enforce the terms of the listing agreement against the sellers.

RealPro represented a buyer for this property. In November 2005, RealPro submitted an all-cash offer of $17 million for a ready, willing, and able buyer. The listing agent indicated that the terms of the buyer’s offer were acceptable to the sellers, except that the listing price was being increased to $19.5 million. The parties did not enter into a purchase agreement.  RealPro nevertheless sued the sellers for its $340,000 commission as a third party beneficiary of the listing agreement.

The court denied the commission. RealPro argued it was entitled to its commission because the word “or” separated $17 million from “such other price and terms acceptable to” the sellers. The court, however, interpreted “or” to include “such other price.” Stated in another way, the court interpreted the listing to be for $17 million or such other price, plus terms acceptable to the sellers. According to the court’s reasoning, requiring a payment of commission upon receipt of a full price offer had many possible results that could not have been intended by the seller, such as an obligation to pay multiple commissions in a multiple offer situation regardless of the terms of the offers, or an obligation to pay a commission if the buyer backed out.

The broker in this case is seeking a petition for review before the California Supreme Court.

Source: RealPro, Inc. v. Smith Residual Company, LLC (2012) 203 Cal.App.4th 1215.

From C.A.R. Realegal

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Continued Tracking of Napa Valley Distressed Properties in the $800,000 to $2M Range, now 7 of 53

This is the continued tracking, started in July 2009, of the number of distressed sales (in foreclosure, a short sale or a bank owned property, REOs) for homes priced from $800,000 to $2,000,000 in the up valley region of the Napa Valley. By up valley I mean the Cities of St. Helena, Calistoga, Angwin, Deer Park, Oakville, Rutherford and the Town of Yountville and only those listed in BAREIS, my MLS. Today there are 4 distressed sales of 68 active listings in this price range with two of these in escrow, compared to 7 of 53 on February 2nd (sorry I missed a couple of months). 2 of these distressed sales are REOs and 2 are short sales with 2 of the 4 in escrow. Of the 4, only 1 is in the Napa Valley, 2 are in Angwin and Pope Valley and the other 1 is in the surrounding mountains. Next look June 1st.

Interesting note from RealtyTrac, the market share of foreclosed homes under $1 million is shrinking, but those among properties valued over $1 million are rising – up 115 % since 2007.

Calistoga home, $800,000, 3 br 2 ba, 1,972 sf, 3 acres

Pope Valley home, $899,900, 4 br 5 ba, 7,000 sf, 67.4 acres, multiple offers

371 Quail Run Unkn, Angwin, CA 94508 (MLS # 21204620)

Tucked away on a partially wooded 6+ acre lot, this Tahoe-style home offers vineyard, valley and mountain views -- plus separate contemporary 1 bdrm guesthouse. Large formal living/dining room and separate family room with fireplace adjoin spacious kitchen. Gracious upstairs master suite overlooks valley. Extensive view-framing decks downstairs and up. A little dated but easy to make your dream country property. Part of acreage possibly plantable

Property Type(s): Residential, Single Family

Listing information deemed reliable but not guaranteed. Read full disclaimer.

Listing provided by Teri Buchanan, Heritage Sothebys International Realty

(view all details for MLS #21204620)

MLS # 21126343 in St. Helena, CA 94574

St Helena Estate nestled high on the hill! Maison de Joie is a nearly 2 acre wooded escape, private, overlooking Napa Valley vineyards. Just moments from the charming town of Saint Helena, restaurants, wineries & more. Napa Valley Views capture the essence of Napa Valley living. The expansive 4600 sf home offers 5 bedrooms, plus a lower level suite with its own parlor & 2 addt'l rooms.

Property Type(s): Residential, Single Family

Last Updated	12/21/2011	Tract	n/a
Year Built	1986	Community	St. Helena
Garage Spaces	n/a	County	Napa
Total Parking	n/a	Walk Score ®	8

Location

Listing information deemed reliable but not guaranteed. Read full disclaimer.

Listing provided by Martha Rodman, Pacific Union International

(view all details for MLS #21126343)

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Napa Valley pendings at 248 in March 2012 but short sales and bank owned sales, REOs, are up

• In March there  were 138 residential sales which includes single family and townhomes/condos. The 147 below includes manufactured homes.
• In March, of the 138 residential sales 27 were REO’s, a 19.6 %, and 47 were short sales, a 34.1 %. Total distressed sales were 74, a 53.6 %.
• The current number of pendings which includes sale pending and contingent sale pending is 248. If all these close, which is unlikely, then this would be the highest since May 2011.
• The number of pendings as of today, May 1st, is 442. Of this number 49 are REOs, a 11.1 % and 248 are short sales, a 56.1 %.
• Total distressed sales for Napa County that are currently in escrow 297, a 67.2 %. This number has been in the mid 50 % range over the last few months.

California pending home sales highest level in nearly three years

California pending home sales posted higher for the third consecutive month in March, rising from both the previous month and year, C.A.R. reported Tuesday.  Additionally, the share of distressed sales dropped for the second consecutive month, as equity sales typically increase with the start of the spring home buying season.

C.A.R.’s Pending Home Sales Index (PHSI)* rose from a revised 126.5 in February to 143.7 in March, based on signed contracts.  The March 2012 index was the highest since April 2009, when the PHSI was 146.9.  The index also was up from the 128.9 index recorded in March 2011, marking the eleventh consecutive month that pending sales were higher than the previous year.  Pending home sales are forward-looking indicators of future home sales activity, providing information on the future direction of the market.

• The share of equity sales – or non-distressed property sales – compared with total sales increased in March to 55.4, up from 51.1 percent in February.  Equity sales made up 50.2 percent of all sales in March 2011.
• Meanwhile, the total share of all distressed property types sold statewide decreased in March to 44.6 percent, down from February’s 48.9 percent and from 49.8 percent in March 2011.
• The share of short sales was down again in March.  Of the distressed properties sold statewide in March, 21.1 percent were short sales, down from February’s share of 23 percent but up from last March’s share of 20.1 percent.
• The share of REO sales also declined in March to 23.1 percent, down from February’s 25.2 percent and down from the 29.4 percent recorded in March 2011

• 

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Below is an article from C.A.R. Market Matters about the improving real estate market. As almost everyone has been posting here for the last several months, the market is hot and as many say, has become a seller’s market.

There was an article in today’s Napa Register, our local daily here in the Napa Valley, about one first time home buyer putting in offers on 11 different properties without yet getting into contract. Her price range was up to $255,000 which means there are currently only 28 single family homes not sold here. Given there has been 113 solds in that price range since January 1st of this year, that equate to only a 1 months supply of unsold, not in escrow homes. Talk about a low supply of unsold homes. If my memory serves me, that is the lowest I have every seen here. All I can say is good luck to you entry level home buyers. HAVE PATIENCE!

It’s safe to sell your home again 

While analysts debate when the housing market will hit bottom, for a surprising number of cities the turnaround has already begun.  In December, prices rose in 109 of the 384 metro areas tracked by data firm CoreLogic.

• There are certain signs to help determine if a particular neighborhood is on the verge of a rebound.  For instance is local employment on the upswing?  That’s a critical factor for a region to get itself on the path to recovery.  Improving jobs picture has led to shrinking housing stock across the country, as investors and bargain hunters have started buying up foreclosures that have been preventing a recovery.
• For years, buyers were scared of overpaying for a home, but less so now.  Many buyers have grown accustomed to thinking they’ll score deals, so they tend to act slowly, and typically start bidding around 10 percent to 15 percent below list price.  However, a growing number of buyers are beginning to realize that if they wait too long in this market, they may miss out.
• Sellers can hold firm on price if they’re patient.  The days of having to deal with low-ball offers are coming to an end.  The higher the price, the more patient the seller must be.  Cheaper homes are affordable to more buyers and appealing to investors, so recoveries usually start there.
• Sellers should keep in mind that while they don’t have to placate low-ball offers anymore, they also can’t shoot for the moon either.  Working with a REALTOR® and setting a realistic price from the get-go is key.
• Sellers should know what they’re competing against.  Homeowners should let their home’s value dictate the price.  While this may seem self-evident, some owners may have lost sight of it during the bust.  On the one hand, some sellers clung to the false hope of a return to boom prices, so they set prices unrealistically high.  Others may have gone too far the other way, and set their price too low.
• It’s also important that sellers understand they’re no longer competing with gutted foreclosures.  Buyers are tired of looking at worn-down, neglected, distressed properties and often don’t have much extra money to do a lot of fixing up.  REALTORS® often report their clients are willing to pay a little more for a home that’s ready to move into.

Thank you for reading this post. If I can ever be of help in finding you the perfect property here in the Napa Valley, please email me at Curtis@NapaValleyAddress.com

Your Napa Valley Broker Extraordinaire, selling Real Estate here from its heart, Yountville

My website & blog: www.NapaValleyAddress.com